4. Bretton Woods Suppose that after World War II, the United States and France agree to peg their currencies to each other under the Bretton Woods system at an exchange rate of $1.00 per franc. Suppose American demand for francs increases, and the equilibrium dollar price of a franc rises to $2.00 per franc. Which of the following actions could the U. S. government use under Bretton Woods to help eliminate the balance-of-payments imbalance at the pegged exchange rate? Exchange dollars for francs in order to buy gold from France Borrow French francs from the IMF and use the francs to buy dollars Decrease U. S. income taxes What was used to settle international debts and denominate international trade contracts under the Bretton Woods system? Gold The U. S. dollar IMF quotas True or False: With either dollarization or currency boards, interest rates must be different from the reserve currency country’s prevailing rates. True False

Which of the following statements is correct? a. the managers of established, stable companies sometimes attempt to get their state legislatures to remove rules that make it more difficult for raiders to succeed with hostile takeovers. b. hostile takeovers are most likely to occur when a firm's stock is selling below its intrinsic value as a result of poor management. c. stockholders in general would be better off if managers never disclosed favorable events and therefore caused the price of the firm's stock to sell at a price below its intrinsic value. d. the efficiency of the u.s. economy would probably be increased if hostile takeovers were absolutely forbidden. e. in general, it is more in bondholders' interests than stockholders' interests for a firm to shift its investment focus away from safe, stable investments and into risky investments, especially those that primarily involve research and development. icon key question 6 of 10 b multiple choice 01-060